South Korean Won: Strong exports support KRW and KOSPI – DBS
DBS Group strategists Taimur Baig and Nathan Chow expect South Korea’s August exports to stay strong near 60% year-on-year, underpinning the outlook for the KOSPI and Korean Won (KRW) even as growth moderates from June’s peak.
DBS Group strategists Taimur Baig and Nathan Chow anticipate that South Korea's August exports will remain robust, hovering near a 60% year-on-year increase. This positive outlook for the KOSPI and Korean Won (KRW) contrasts with moderating growth from June's peak. Additionally, headline and core CPI are projected to remain around 3%, supporting the view that the Bank of Korea (BoK) will likely raise rates again this year.
The upcoming August trade and inflation data will be the primary focus in the week. With exports expected to stay strong at roughly 60% year-on-year, based on the first 20 days of data (+56% yoy), a substantial trade surplus of approximately USD30 billion is anticipated. This fundamental support for the KOSPI and KRW outlook contrasts with the realization that export growth may have peaked at 70.4% yoy in June, and is on track to moderate again in August.
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